Practice

Construction Dysfunction

If there can't be a recovery without new construction, then the last year shows that the recovery is still a ways off.

Federal reserve chairman Ben Bernanke, during testimony to Congress earlier in the year, said, “It’s normal for housing and construction to be an important part of the recovery.” In that case, we’re in for a long economic winter.

Between December 2007 and February 2010, the economy shed some 2 million construction jobs—22 percent of total jobs lost, according to a report by the Motley Fool. Another 1.6 million jobs followed as a knock-on effect of curtailed spending by those workers who had lost their jobs. That adds up to 40 percent of all jobs lost.

The last year has not shown appreciable improvement for construction, according to a new report released by the Associated General Contractors of America. Between October 2010 and October 2011, the majority of U.S. metro areas either lost jobs or reported no new jobs in construction.

A stalled Congress that has yet to pass new infrastructure legislation is partially to blame: A failure to move federal bills on transit, highways, and water has led to slower infrastructure planning at the state and local levels.

Some metro areas will end 2011 in the black. Those that added jobs include Houston; Columbus, Ohio; and Buffalo–Niagara Falls, N.Y. The worst-hit metro areas were hit hard: Wilmington, N.C., for example, saw a 21 percent decline in construction employment. Even when the national appetite for construction returns, it may take time before orders can be filled, given the sheer number of jobs that have disappeared.

Numbers

According to a new report from the Associated General Contractors of America.

337 total metro areas measured Oct. 2010–Oct. 2011

51 areas where construction employment did not change

140 areas where construction employment increased

146 areas that lost construction jobs

And more stats:

7,700 Largest number of jobs lost, in Atlanta Source: Associated General Contractors of America

24 Largest percentage of jobs lost, in Logan, Utah Source: Associated General Contractors of America

5,100 Largest number of jobs gained, in Houston Source: Associated General Contractors of America

28 Largest percentage of jobs gained, in Lake County, Ill. Source: Associated General Contractors of America